WHAT NON IP IN-HOUSE COUNSEL NEED TO
KNOW ABOUT IP LAW; NEGOTIATING IP
PROVISIONS IN CONTRACTS; MANAGING IP
PORTFOLIOS AND ENFORCING IP RIGHTS
January 14, 2015
Universal City, California
Sponsored by Sidley Austin LLP
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2015 ACC-SoCal In-House Counsel Conference
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Panelists
Moderator – Jeffrey M. Olson
– Sidley Austin / Partner / jolson@sidley.com
Panelist – Jonathan Losk
– Knobbe Martens / Partner / jonathan.losk@knobbe.com
Panelist – Wayne M. Smith
– Warner Bros. Entertainment Inc. / SVP, Sr. Litigation & Chief
Patent Counsel / wayne.smith@warnerbros.com
Panelist – Glenn G. Nash
– Sidley Austin / Partner / gnash@sidley.com
Panelist – Bradley H. Ellis
– Sidley Austin / Partner / bellis@sidley.com
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Jonathan Losk
IP Portfolio Assessment and
Management
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A Strong Patent Portfolio
Supports …
 Competitive Advantages
– Exclusivity
– Product/feature differentiation
– Increased market share
– Sustained price premiums
 Growth
– Adjacent technologies/markets
– New/emerging markets
– Spin-out(s)
 Industry Leadership
– Brand recognition
– Key opinion leaders
– Attract top talent
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Alignment With Business Strategy
 Patenting decisions are business decisions
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Not technical
Not legal
Driven by leadership’s vision of where the business is headed
Executed by counsel
 Inventors must know the company’s goals
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Provide regular communication on business objectives
Define problems worth solving
Conduct directed innovation events
Recognize contributions
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Evaluation Criteria
 Understand what you’re investing in
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Strategic/Tactical/Defensive?
Aligned with business objectives?
Disruptive to the competition?
Likely to secure strategic claims?
Can infringement be proved?
 How will the business use it?
 How does it relate to the portfolio as a whole?
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Significant Take-Away Points
 Earn a seat at the table
 Forge relationships with key business functions
 Be the bridge between the board room and the
development labs
 Technical staff are motivated to contribute
– Make it easy to submit disclosures
– Provide visibility into the invention review process
– Deliver clear & timely feedback as to why an invention was
rejected
 Actively develop the content of your company’s patent
portfolio
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Wayne M. Smith
IP Portfolio Monetization and
Litigation
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Warner Bros. Passive Patent
Licensing
DVD6C and BD Premier optical disc patent pools
Cross-licenses with other major optical disc
technology owners
Licensing complementary to business deals
Licensing agency agreement with Thomson
Licensing
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Warner Bros. Patent Enforcement
Institutional reluctance to enforce patents against
companies in our industry
Two patent lawsuits filed in past 15 years
Most enforcement against companies that refuse
to take pool licenses
Patents leveraged to obtain crosslicenses/favorable business terms
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Warner Bros. Patent Defense
95% of claims/lawsuits are by NPEs against
multiple parties
Approach to claims vs. lawsuits
Defense group considerations
IPRs (Inter Partes Review)
First one out or last man standing?
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Significant Take-Away Points
Strategically consider licensing opportunities
Cautiously approach offensive litigation
Cooperation and coordination with co-defendants
and offensive tools can be used to lessen the
impact of NPE litigation
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Glenn G. Nash
IP Licensing Considerations
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Three Licensing Tips
Draft in the present tense
Know default rules that impact the scope of the
license
Understand warranties, indemnities, damages
disclaimers and caps on liability holistically
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Draft In The Present Tense
 Use present tense for license grant/assignment of IP rights:
– “Licensor hereby grants” NOT “Licensor agrees to grant”
– “Assignor hereby assigns” NOT “Assignor agrees to assign”
 Don’t want the licensor or assignor to later claim you do not
have the rights
 Don’t want a third party to later claim you do not have the
rights
 License and assignment language can be important for
many reasons, especially in future litigation (i.e., it may
affect standing to sue)
 Obtain benefit of § 365(n) Bankruptcy Code which applies to
present licenses
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Know Default Rules that Impact
the Scope of the License
 Licenses are personal – they do not extend to third
parties. No extension of license to subsidiaries/affiliates
 Perpetual, revocable and irrevocable licenses
 Assignability/transferability/sublicensability of IP licenses
– Non-exclusive patent, copyright & trademark licenses
cannot be assigned without consent
– Exclusive licenses more nuanced
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Understand Warranties, Indemnities,
Damages Disclaimers and Caps on Liability
Holistically
 Warranties: scope, duration, remedies
 Indemnities
– “A will defend, indemnify and hold harmless B from and against
any action, claim, demand, suit, proceeding, loss, liability or
damage arising out of third party claims that A's product
infringes the intellectual property rights of such third party.”
 How do the warranty and indemnity obligations interplay with the
damages disclaimer and caps on liability?
 Limitation of Liability: address appropriate exclusions
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Significant Take-Away Points
 Draft in the present tense
 Closely review the words of the license grant and
make sure they align with other provisions, e.g.,
termination, assignability
 Don’t assess warranties, indemnities, damages
disclaimers and caps on liability in isolation from
each other
 Read the fine print!
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Bradley H. Ellis
Trademarks and Advertising:
Nominative Fair Use
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Trademarks
 “A trademark is a limited property right in a particular word,
phrase or symbol.” New Kids on the Block v. News America
Pub., Inc., 971 F.2d 302, 306 (9th Cir. 1992).
 Trademark law aims to prevent consumer deception
respecting the source, quality or genuineness of a product
or service.
 The limited property right in a trademark comes at a cost –
removal of the word, phrase or symbol from the language
for certain purposes.
 Therefore, trademark law must accommodate free speech
principles.
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Elements of TM Infringement
 Plaintiff must establish that (1) it has a valid mark that is
entitled to protection under the Lanham Act; and that
(2)(a) the defendant used the mark, (b) in commerce, (c) in
connection with the sale or advertising of goods or
services, (d) without the plaintiff's consent; and that
 The alleged infringer’s use of that mark is likely to cause
consumer confusion as to the origin, sponsorship, or
approval by the trademark owner of the alleged infringer’s
goods, services, or commercial activities.
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Nominative Fair Use
 “Where the defendant uses a trademark to describe the
plaintiff’s product, rather than its own, [] a commercial
user is entitled to a nominative fair use defense provided
that [the defendant] meets the following three
requirements:
– First, the product or service in question must be one that is not
readily identifiable without use of the trademark;
– Second, only so much of the mark or marks may be used as is
reasonably necessary to identify the product or service; and
– Third, the user must do nothing that would, in conjunction with
the mark, suggest sponsorship or endorsement by the
trademark holder.” New Kids on the Block, 971 F.2d at 308.
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Levi Strauss v. Papikian
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Levi Strauss v. Papikian
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Significant Take-Away Points
 A TM is a limited property right
 “Fair” use of another’s mark is permitted
 Consumer confusion over
source/sponsorship is the key test
 To avoid confusion use a disclaimer
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11th Annual In-House Counsel Conference
January 14, 2015 (Universal City, CA)
www.acc.com/chapters/socal/
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